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How Much is Riding on Wi-Fi?
nexex writes "The Seattle Post-Intelligencer's John Cook explores the current flood of money on wireless networking startups and if they could be heading towards another dotcom bubble. Interesting tidbits include, ;More than 60 Wi-Fi start-ups have raised more than $650 million in the past two years, according to VentureWire. Last quarter, there was more money invested into wireless technologies than networking and enterprise software.'" The article's got some good commentary on grassroots-founded tech trends vs. investment-backed tech trends, and tries to explain why wi-fi has caught on so well.
I say it busts. I dont know that it has proliferated enough to be of enough interest that should have generated that type of investment.
I guess what I am saying is, I consider myself a geek of new technologies and Im too cheap to shell out $19-50.00 a/month of Wifi Access at hotspots.
I work for one of these startups (we work on technology that enhances the co-existence of IEEE 802.11b and Bluetooth) and we were basically privately funded. First by the founders themselves and then by some of their close contacts.
The tech bubble affected these wireless companies too. Most VC firms were not interested (or didn't have the money to invest in) wireless technology firms. Certainly the big money for growth was NOT there, and dealing with these constraints was necessary. This company did try for financing from a number of sources and was unable to obtain any VC funding of any sort.
Wireless is here to stay because I think most of these wireless technology companies that have been built during the "bust" and have had to learn to be profitable and have low burn rates in order to survive. This has allowed better structured companies to exist.
Another one of the companies that I consult for is totally privately funded from a profitable operating company. This has created a situation that is sustainable for the long term without external financing. There is no "bubble" here. Wireless technology companies are here to stay.
These are the good old days you'll be telling your children about. Make them worthwhile.
... not for home or office wireless. It's just too easy now to buy a nice, cheap little setup to free your laptop from a desk.
...it'll only be to the extent for those startup's that didn't have a good revenue model figured out in the first place.
You think Starbucks is putting in wireless from the goodness of their heart? Bzzz...wrong answer... they'll sell more coffee...probably a LOT more.
If this blows up, it's not going to be to the extent of the fantasy dot-com boom that started with Netscape and finally died out in early 2000, and is responsible for this economy....
But that doesn't necessarily mean 802.11b, however. Ultimately though, computers are going to continue to shrink and converge with such devices as mobile phones. Data transfer and communications are going to be fundamental to such devices.
Now, whether 802.11 or its descendants are going to be the facilitators, or whether it's satellite; or maybe even a combination of both, wireless technology will be the future. In my mind, the fusion of short range and long range makes sense; satellites are useless indoors or in cities with skyscrapers or underground in facilities like subways or busses. 802 is perfect for this. On the other hand, 802 has a very limited range; you drive from Washington to NY, you still want to be able to get your mail. Satellite slips in.
Either way, wireless technology is going to continue to play an increasing role in our lives. People are insisting upon staying connected with the rest of the world no matter where they are, and connectivity without wires facilitiates this.
-- james
Personally, I'm not going to get excited about wireless networking until it is availably globally. Here in rural Pennsylvania, it's hard enough to even get broadband. Isn't the whole point of wireless that you are connected wherever you are?
"and tries to explain why wi-fi has caught on so well"...
How about: the same reason why the GUI, the mouse, the floppy drive, USB and heaven knows how many other standards have caught on so well in the PC markets:
Apple.
They pushed it. Note: I'm not saying they developed it; but there's a big difference between some geek sitting in his basement with a really cool tech, and getting the entire world to use it. Apple is the link between the two in this case.
yep, I'm gonna get marked as a troll or overrated for this, but I got karma to burn.
-- james
that there is a wireless bubble right now.
Wireless is sexy and sci-fi. But it's also getting pushed hard right now, when it can't deliver the quality of wireless networking that people in the general public have in their heads. You guys better get caught up fast, or there's going to be some dissilusionment and a wireless bust and a few companies are going to have to die.
This is old news.. i've been watching wireless for a while, and the business model sucks ass till you invest billions to control whole population areas, so people could effectively use the wireless anywhere in their area, so your broadband becomes your wirless connection.. One ISP provider gives it all to you.
There has already been a company that went under trying to do wifi setups, look at metrocom or what ever that pole top wireless was out in Cali.. they went under, as with the company that was to provide the wireless to Starbucks, they were stupid though, trying to put a T1 to every location to feed these AP's, when you could use a 3mb dsl for 1/10th the cost. That company already went under and was taken over by someone else with the same idea.
Someone related wireless to be similar to fax machines.. It was either Fedex or UPS that spent millions outfitting locations with faxes, so that anyone could send a document around the world same day.. they didn't realize that the fax network was going to build it's self, people would buy low cost fax machines and send their documents themselves for pennies instead of spending dollars at the delivery company. Wifi is sort of like this.. unless they up the power for providers or something the range sucks ass, you would need cells of wifi that cover area like phone signals..which doesn't seem to happen. You think that cell phone coverage sucks.. imagine needing a wifi tower like ever 300 ft.. not going to happen.
Interestingly enough, the article makes "WiFi" sound like a local/regional phenomenon. Sure, it's a Seattle publication, but it makes one wonder. After all, wireless networking clearly depends on the network effect and the ranges are still short enough that the technology's better suited for high population densities. And even then, you need a concentration of mobile users.
Personally, I've been waiting for 802.11* to take off "globally" before buying a card. And I might have to wait.
I'm a Montrealer now living in Atlantic Canada. Never been to Seattle or anywhere on the North American West Coast.
There are interesting 802.11 projects in Montreal (including pilot programs in universities and phone booths) but even that seems fairly limited.
Alexandre http://enkerli.wordpress.com/
You won't make money if people don't want to pay for what you're bringing to the table, no matter how "cool" it is. And if it costs you more to deliver your product or service than people are willing to pay, then you still lose.
The VC community is such an amazing bunch of lemmings. I've been involved in several roundtable discussions with VCs, and one thing I took away from those meetings is that VCs rarely go against the grain. It's a hive mind.
So they've decided that WiFi is cool technology that will become ubiquitous in some fashion or another. They've therefore opted to invest in companies that offer WiFi products and services. But how many of these companies actually know how to turn a profit? How many of them have a bona-fide business plan that goes beyond, "get WiFi out to the masses and hope we somehow make money off it."
In the mean time, VCs are shutting out a lot of good ideas that don't have the "sexiness" (I'm serious, a lot of VCs actually talk like that) of WiFi. To paraphrase Jack Nicholson, "this VC system needs an enema!"
Read the EFF's Fair Use FAQ
Why should there be a problem with different cards for personal and comercial networks. If the access is reasonably priced I'll just put in the comercial card all the time, and use a VPN (ssh) when I need to get to the personal network.
Oh, I see the problem, wireless is still a fringe technology and not cheap. My cell phone replaced my wired phone years ago, becuase it is cheaper for me. (No long distance charges, and more time than I can talk in a month for less than a wired line) In a few years expect that comercail data networks will be cheap enough that few people bother with a personal wireless setup.
Now if only someone would tell the major players this and get them to see the light.